Monday, October 23, 2006

US offers SKorea big tariff cuts on "difficult" first day of trade talks

JEJU ISLAND, South Korea (AFP) - The United States said it offeredSouth Korea tariff cuts worth 2.4 billion dollars a year to try to make progress on a free trade pact, but both sides described the first day of talks as difficult."We have submitted these offers in efforts to make progress, but we can't make progress alone," Assistant Trade Representative Wendy Cutler told reporters Monday.

Outside the venue, a beachfront hotel in the southern resort town of Seogwipo on Jeju island, riot police held back an estimated 7,000 protesters who believe a free trade agreement (FTA) spells doom for South Korean farmers.

Cutler said the talks may continue beyond an unofficial year-end deadline, set to givePresident George W. Bush time to fast-track the legislation through Congress.

"We are still trying to conclude talks by the end of this year or early next year, but we should not hurry," she said.

"FTA talks by their nature are very complex, particularly when talking about two large, sophisticated economies."

After three earlier rounds made little progress, Cutler said the US Monday made improved tariff offers in agriculture, industrial goods -- mainly auto parts -- and textiles.

"We look forward to Korea tabling offers this week as well."

Cutler said the tariff eliminations or reductions were worth one billion dollars in industrial goods, 1.3 billion dollars in textiles and 135 million dollars in agriculture.

But neither side had officially started negotiations on rice, she said, focusing on "less sensitive issues first in efforts to make as much progress as possible."

She described the first session of the five-day round as "difficult for a number of reasons."

The US wanted movement on rice, other agriculture products and industrial goods while the Korean side was looking for progress in textiles.

Cutler also called for progress on automobiles, pharmaceuticals and intellectual property rights as well as on non-tariff barriers.

"From a broad perspective, I think recent events on the Korean peninsula just underscore the importance of the US-Korean alliance and a mutual interest in strengthening and cementing these ties," Cutler said.

For the activists, rice is indeed sensitive.

An estimated 7,000 wearing red headbands reading "Stop FTA", marched in mid-afternoon towards the hotel. They were blocked by a barricade of ten containers guarded by about 200 riot police.

Police deployed two water cannon and two fire trucks, with back-up units nearby.

About 30 jumped into the sea to reach the hotel beach but were overpowered by police, who had helicopters and some 10,000 officers on standby. The coastguard also deployed patrol craft to keep activists in boats away.

"Signing a free trade agreement with the US, the world's agricultural powerhouse, is ... the death penalty for Korean farmers," the Korean Peasants League said.

"We are ready to risk our lives to stop the free trade deal which will destroy our agricultural industry," Seo Jeong-Hee, head of the Korea Advanced Farmers Federation, told a press conference.

Any pact opening up agriculture would force half of the nation's 3.5 million farmers to leave the land, he said.

Both governments want a deal approved by their legislatures before Bush's trade promotion authority expires next June.

However a South Korean official told reporters: "The talks are difficult. It's hard to make progress."

"South Korea insisted it would not lift tariffs on cars or scrap its new medical policy," he told AFP.

The Seoul government has said an FTA will help Asia's fourth-largest economy increase exports and upgrade its industrial structure.